Monday, July 26th, 2010
REAL ESTATE - Housing construction and purchases took another drop in June. Builders of new homes are at the slowest pace in years. Sales of existing homes decreased for the second month in a row and the index of leading indicators declined for the first time in a year.
Predictions from Higher Intelligence:- “Banks will control the housing market for several years to come. Even if builders could sell a new home for less than the construction costs, they will not be able to compete with banks selling repossessions for pennies on the dollar. We see prices rolling back to what they were a decade ago.”
Commentary: Without housing being able to rebound, the economic recovery will be unable to gain speed. Housing will only start to rebound when banks flush out their inventory of foreclosures, allowing prices to stabilize and builders to once again build new homes.